Diversification in Digital Media and Publishing: Part I

Where are forward thinking publishers looking for sustainable audience growth and revenue?

On 20 September, Bibblio and our friends at Sovrn brought the Future of Media and Publishing meetup back to New York City, getting together a group of future-oriented publishers to discuss how the industry is changing and what they’re doing to adapt. We covered so much ground that we split the write-up of the evening into three parts. The first section features our speaker, Guy LeCharles Gonzalez (Publisher at Writer’s Digest and Director of marketing at F+W Media). Now we have the panel, featuring Carey Polis (Digital Director from Bon Appetit), Joe LaFalce (VP, Business Development at POPSUGAR) and Daniel Stedman (CEO & Co-Founder of Brooklyn Magazine and Northside Media). Enjoy Part I!

Search, social, or somewhere else?

Mads introduced the theme of the evening, which was approaches and strategies for diversifying audience and revenue. The opening question was what does traffic composition look like for each of the panellists right now?

Carey said that search is currently more than 50% of their traffic, social is about 20% (down from 30-40% a couple of years ago), the newsletter is 10/15% and ‘other’ makes up the rest. She’s pretty happy with the current mix – it’s search heavy, but that reflects the nature of Bon Appétit’s audience.

The panel at the Future of Media and Publishing meetup, New York City

Daniel said that the traffic figures for the Northside media properties are pretty small, and diversification for them is primarily about their different sister projects. Northside’s story started with just the L Magazine, which ran for 12 years, and now the business has branched out to other sites, live events and they’ve also created a content studio (“every media company has one now”, Daniel quipped). Diversification became a necessity for them when the print event listings business collapsed, which is a familiar story to many publishers.

Although live events anchor the business these days, you couldn’t just take the digital offering away and not see a significant impact – it’s the marriage between content and live events that creates the best results. This was something that we’d heard back in the UK as well at the State of Digital Media and Publishing from Linda Blank at SUITCASE Media.

Joe said that, like Bon Appétit, the majority of Popsugar’s traffic comes from search and social, and another big source for them is strategic partners who feature their content. Joe certainly wants to drive traffic to the site so ad-teams can generate sales, but he’s also looking to build specific communities on social platforms, and they’ve invested heavily in these. The nature of the content that they put out on those platforms is very important, as it defines what the audience is going to be. YouTube, Instagram, Snapchat: each platform needs a slightly different approach to make sure that they connect with the audience. It’s really important to Popsugar that they build trust with these communities.

Is Facebook your friend?

In a conversation about traffic, Mads inevitably brought up the implosion in Facebook referrals since the algorithm change earlier this year. It’s taken down a number of businesses who built their business model solely on Facebook traffic, the latest being Unilad. He added that it was now common in the VC world for investors to be wary of media businesses; many had boasted of impressive traffic and visitor metrics (perhaps too impressive…) but had then been unable to monetize those audiences. How do you make money from social communities?

Joe said that Popsugar has been relatively lucky, and was still getting healthy traffic from social: they have seen volatility, but not really a decline. He put this down to the high quality content that they produce and the strong relationship that they have with their community. The key is figuring out how to cultivate trust on the platforms and then how to sustain relationships. Popsugar has managed that, and the result is social visitors clicking through to the site a lot. That leads to monetization.

Sharing opinions at the Future of Media and Publishing meetup, New York City

Carey said, perhaps surprisingly, that the Facebook algorithm change had actually been positive for Bon Appétit. It had certainly led to volatility in social traffic, yes, but realising that it was a mistake to rely on Facebook had given them the freedom to return to prioritizing content quality. Simply trying to acquire (often low-quality) volume had stopped being the priority. As traffic numbers fell they began to prioritize other metrics like engagement, and that has led to changing the way they look at their audience, in a positive way. Of course ‘engagement’ is harder to measure numerically, but using it as the north star has really improved brand visibility and has had very positive effects: traffic is up significantly year-on-year.

The shift means that they now care so much more about editorial content strategy, and Carey said that that can be seen in the growing strength of their writing, visuals and brand identity. They get to prioritize the quality of what appears on the website above everything else. All in all, it’s a great time to be a content creator.

Daniel said that Brooklyn Magazine and The L never reached traffic numbers where programmatic advertising was meaningful at all, so volume was perhaps less crucial to them. They have tried different advertizing tools, but never at the scale. In one sense they missed the boat, but in another it meant that they always got to focus on making quality content.

God is a metric

Connecting with the talk about the changing approach to measuring success, Mads asked each of the panellists what their “god metric” was – what you’d be thinking about if you woke up and checked your phone at 3am…

Joe said that, for him, the key metric is returning visits as a percentage of total traffic. A high proportion of returning traffic shows him that they’re doing a good job of building trust and establishing a strong bond with their target community.

Daniel said that Northside wasn’t at the scale where returning visitors is a particularly meaningful metric. He’s more concerned about in-visit engagement, measured in engaged minutes, a metric which he’s discovered during the last year.

Carey said that the way they measure engagement is the number of ‘loyal visitors’, which to them means somebody who makes at least four visits to the site a month.

Turning loyalty into gold

With the theme of valuing engaged and returning visitors, Mads asked how you turn that loyalty into revenue.

Carey said that video has led to the biggest increase in revenue for them. It’s now a significant part of their overall revenue, and even two years ago it would have been a very small part. A lot of this money is coming from YouTube, and working with sponsors making white-labelled content. Examples of their video products are the 4+1 package, which consists of four editorial episodes and then one branded episode, or a branded series.

Adjusting to video had been a learning process – they didn’t know a lot about YouTube strategy, and worked with video people at Condé Nast to create one. One thing that they learnt is that they have a lot of editors who are great on camera. This only came to light when they were screen-tested. In response to this they’re Investing in editors and changing priorities, for instance the ‘test kitchen’ is now all on camera which wasn’t the case. They had 1 million subscribers three or four months ago, and they’re now at well over 2 million, so there’s huge growth. Operational changes have also been necessary to allow for this success. One thing Carey noted about this is that at legacy publishers people can get very used to “this is my lane”, so it’s important to be flexible and try to get out of that mindset.

A question was asked about Bon Appétit’s video strategy on YouTube: how are they managing content and output – is it part of a set strategy or is it left to the editors who are becoming influencers in their own right?

The audience at the Future of Media and Publishing meetup, New York City

Carey said that they’ve had a lot of conversations about this in the company. Editors want to be careful with brands they represent, as it’s very personal, and they’re quite sensitive about it. What gets worked on is primarily driven by the partners coming in who want to collaborate with Bon Appétit. Then there’s usually a conversation about what the brand wants to do, and then they work out which particular editors profile it fits with.

Daniel said that 50% of Northside’s income comes from live experiences, so social revenue etc. wasn’t something that he thought about a lot. Diversification of revenue had actually posed a bit of a problem for them. At one stage they reached a point where they had too many revenue channels for a relatively small company. The content studio was growing very quickly but wasn’t creating value for the Northside festival, then the festival was driving a lot of visits to Brooklyn magazine but sponsorship packages didn’t reflect that. One solution to that was to try and attribute revenues better and annualize them, but it’s not an easy balance for them to strike.

Joe said that the majority of advertising revenue for Popsugar comes from their branded and native content studio – The Bakery – whose content is then distributed across social. Display revenue is declining for them, which isn’t a surprise. It’s still tough, as it’s high margin, but on the other hand it doesn’t drive the repeat business that the branded content studio does drive and which leads to stable growth.

New horizons for monetization

Mads asked the panel what is the true role of content in modern digital publishing and media businesses? He mentioned the famous diagram which Walt Disney drew to explain how his business worked: the feature film is in the middle of the page, and arrows lead from it in all directions illustrating how it supports and enables many other revenue streams, like the parks and merchandize. Mads was curious about what that map would like for each of the panellists? Does content work for them they way it does for Disney?

Joe agreed that content had to be thought of as an enabler of other revenue streams, and that he’d even made a version of that graphic before himself.

In that spirit, Popsugar has leant into lots of new business lines this year. They’ve launched a branded ready to wear line with Kohl’s which is in 1000 stores across the country, and a beauty line with Ulta, leveraging the power of the brand. This is why trust and connection with the brand is so important – Popsugar can take 30,000,000 people to these new products. They’ve created experiential business lines too, e.g. Play/Ground, celebrating the playful and grounded side of people, which was visited by 10,000 women over two days. They’ve also launched a new content development studio, Toy Rocket, which is working directly with studios and television networks to incubate and produce long-form content and pitch to producers and studios.

Diversification is going well, but there are still parts of the puzzle they need to figure out, because it’s a key way to de-risk the ups and downs of an unpredictable ad market. This is really important for resilience, not to mention that they’ve got really strong brand equity and a loyal audience which they wouldn't be monetizing properly if they were only serving ads.

Carey said that one example of where content enabled other monetization was with affiliate revenue, and that in-article affiliate promotions were something that Bon Appétit are doing a lot now. They hired an e-commerce editor last year, which she admitted was quite late to the party, but they’d had a lot of success with the concept as it works very well for cooking. This is because of the combination of the opportunity to recommend products organically in content, and the trust that their audience have in them. They always disclose affiliate products, and their editors are experts who don’t recommend anything that they don’t believe in, which is key to maintaining that trust. As an example of how successful it can be, an affiliate sold 4,000 towels on Amazon a few weeks ago after being featured on Bon Appétit.

Mads suggested that, as a brand, you need to start from the position of having demonstrated the expertise before you can tie that in to e-commerce. Carey agreed, and said that part of the overall strategy is to be very driven by particular expert personalities. Their editors are well known and are big on Instagram and feature in YouTube videos. They’re also careful in what they endorse – you won’t find any roundups of the ‘15 best examples’ of something. It’s all personally promoting individual products: “this is the gravy boat we’re really into right now”.

That's all for Part I - as you can see, there was a lot of really great in depth discussion on some key topics. Keep any eye out for Part II, which we'll be releasing next week.